The Information just featured my controversial take on why traditional VCs are being disrupted in the age of Ultra-Lean AI Native companies. Welcome to the world of Seed-Strapping. It is the most disruptive trend Silicon Valley has seen in years. I told them about a founder who raised <$1M, built a $7M business in 12 months, and shocked his investors by telling them he will NEVER raise again. While AI unicorns like Cursor and Harvey are grabbing headlines for raising hundreds of millions, a wave of underdog startups is gaining momentum. They are raising once, becoming profitable immediately, and keeping 70%+ of their companies. Let that sink in. And if you think that's impressive, look at Cal AI, founded by Zach (who is just 17 years old). He built a nutrition tracking app that is disrupting legacy giants by leveraging AI and innovative marketing. Within 6 months of launch, he hit $12M ARR with minimal outside funding. It's mind-boggling, when you compare this to traditional VC-backed founders who raise 3-4 rounds and end up with single-digit equity stakes. The math is brutally simple: AI has driven the cost of software development and operation to nearly zero. One engineer with AI tools can now build what previously required entire teams. Customer service that needed 50 agents can run with 5 and an AI copilot. For investors, it's a double-edged sword. • Best case: 10X returns on minimal capital. • Worst case: Those SAFE notes never convert because companies never raise again. Some investors are now adding clauses requiring dividend payments if no further rounds occur (although I wonder if that is still enough to save the traditional VC model). But what’s fascinated me the most is the psychology of these founders. They don’t need to build the next Apple or Google. They simply want to work hard, be their own boss, build cool shit and make $5-10M a year while maintaining control. And they are realizing this is both possible and achievable with AI leverage. The playbook for such founders is simple: 1. Raise one, well-structured seed round 2. Use AI to slash operational costs 3. Focus relentlessly on revenue and profitability, not vanity metrics 4. Negotiate SAFE terms carefully (they may never convert) The age of the lean, profitable, founder-controlled AI company is here. And this million-dollar question is keeping VCs up at night: “Why would any AI-native founder raise endless rounds of VC funding again?” —————— I am actively helping next-gen founders who are building AI Native companies. If you are one of them, let’s connect. Or if you know someone building or aspiring to build such capital-efficient AI companies, share this post with them. Lastly, if you are interested in learning more about lean AI-native companies, I created an open-source leaderboard to track such companies (link in the comments). (Shoutout to @theinformation and @nmasc_ for featuring my thoughts on this trend that is redefining startup funding). – at San Francisco, CA